The Crimea: Already The Next Hot Real Estate Market? (MT)

For the first time since Putin’s Crimea’s annexation two months ago, property owners on the peninsula can officially register their properties with the Russian government in anticipation of eager buyers and a real estate market that has been frozen in legal limbo since the takeover.

According to the Moscow Times, Ukraine has blocked the Russian government’s access to the previous property register – meaning that a new registry must essentially be built from scratch. On Friday, the first registration center under the aegis of the Russian cadastral system was opened in the republic’s administrative center, Simferopol, with similar centers to be opened in all Crimean municipalities this summer.

However and with a capacity of handling about 300 cases a day, the centers will be hard pressed to register every property in the Crimea – a process that should take more than one year to complete. Nevertheless, the Moscow Times reports that:

Crimean real estate agencies noted an abrupt increase in calls from interested Russian buyers even before the referendum in March, and local prices have skyrocketed between 12 and 75 percent on expectations of a rush of cash into the sector. Even without a legal purchasing outlet, the value of a square meter of new, budget-class residential real estate in resort capital Yalta, for instance, grew from $750 in 2013 to between $1,000 and $1,600 this year, while the price of higher-quality real estate rose from $2,000 per square meter to $2,500, said Vitaly Kononov, commercial director of Crimean developer Konsol-Stroy LTD.

Kononov expects to see prices continue to rise over the coming years by up to 12% while others are even more optimistic and expect property prices to rise between 20 and 30% over a short period as soon as private investors begin developing resort properties on the peninsula and infrastructure improvements are made.